Matthew Tilt, head of industrial and logistics at the commercial property firm’s Birmingham office, said: “Even if current elevated levels of new development continue, a significant and unprecedented increase in construction will be required in the next few years to ensure internet retailers are able to continue to fulfill their customer orders.”

At the end of last year 2.8m sq ft of speculative development was underway in the West Midlands region, spread across 17 units, but Matthew commented: “The warehouses under construction and the amount of new space planned is not keeping pace with the demands of internet retailers and their distributors.

“This is evidenced in deals where lettings have been agreed prior to the buildings being physically completed.

“The lack of available stock in the West Midlands meant that for the second successive year prime headline rental growth was recorded in all key markets and we are expecting further growth in 2016.”

Despite a stellar year in 2014, take up in the logistics sector was down in the West Midlands during 2015, with less than half the total seen the previous year, according to the report.

Matthew says this is due to a raft of major design and build deals in 2014, which spurred record annual take-up, with the 2015 figures being similar to those seen in 2013.

“Take up in the mid box (50,000 – 100,000 sq ft) sector increased by 20% year-on-year, underlining the ongoing depth of occupier activity and increasing demand for this type of space,” he said.

The report highlights activity in Coventry, where London Taxis acquired a 19-acre site at Ansty Business Park from the Homes and Communities Agency and Jaguar Land Rover bought 60 acres from St Modwen to expand its headquarters at Whitley Business Park.

Birmingham saw the city council exchange on its freehold acquisition of an 18-acre site at The Hub in Witton and the development of the new wholesale markets facility of 242,085 sq ft. In Minworth, the speculative development of DC1 at Midpoint Park, extending to 127,500 sq ft, was let to Syncreon at a rent of £6.35 per sq ft.

Availability across the West Midlands contracted by 11% during 2015 to stand at 28.2m sq ft, a relatively modest fall compared with other regions.

Matthew added: “This reflects the commencement of a substantial amount of new development, which partly offset a much more significant 22% fall in second hand supply.”

On a national level, LSH conclude that a significant and unprecedented increase in construction will be required in the next few years to ensure internet retailers are able to continue to fulfill their customer orders. Despite elevated levels of new development LSH warn that retailer and distributor requirements for logistics warehouses will exceed the country’s available stock by 25m sq ft by 2020.

Steve Williams, national head of industrial and logistics at LSH, said “The impact of the growth of e-commerce on the retail industry has been well documented and steps are being taken to try to address some of the issues facing our high streets. However, the logistics industry will also need to adapt urgently if it’s to continue to support internet retailers in fulfilling their customer orders. Some of the sector’s more forward-thinking participants have already recognised this, but more needs to be done if we want to continue to enjoy the benefits of e-commerce.”